MEMC Reports Surprising Loss, Shares Down AH

MEMCElectronic Materials (WFR) is surprising traders after the bell today,but not in the way many expected. With the technical action improvingin WFR in recent weeks, they were expected to post a quarterly profitand begin the road to lasting profits. That path remains on hold fornow. While the company reported revenues much higher than what analysts expected at $438 million (more than double the year ago quarter), they missed badly on the EPS side, posting a loss of .04/share. Analysts wereexpecting a profit of .04/share, so a big disappointment there. Traders are reacting after hours, sending the stock down about 7%.

As CEO’s do best, Ahmad Chatila remains positive: “Improving endmarkets, successful efforts to recapture customer share, and theaddition of SunEdison to our portfolio have together driven significantsales growth for the fourth sequential quarter since the severe cyclical downturn. The efforts and investments undertaken to rebuild andreposition our company are beginning to deliver results and we believewill become more evident as the year progresses.”

Despite the miss this quarter, the company reaffirmed its full yearrevenue and EPS guidance and believes they may even hit the high end oftheir previously guided range.

It will be interesting to see if the stock can find supportaround that $15 range. Analysts were expecting a profit last quarterand WFR missed by posting a loss. The trading action was ugly the next day with the stock gapping down nearly 20% on heavy volume. If thathappens again tomorrow and the 50 and 200 day moving averages are takenout, WFR once again becomes technically questionable with a retest ofthe lows a possibility. I think it will hold support above $14.50 based on the fact the company is reaffirming guidance, but we’ll see how itplays out tomorrow. I’m still looking for a long term entry point onWFR.

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